We often describe the tech industry as being global from day one, but that is not strictly true.
In reality, location makes a big difference for a startup’s prospects as it grows and seeks out capital and talent, and all companies grow in accordance with domestic government regulation.
These conditions are what have allowed London to join the ranks of international tech hubs like Silicon Valley and Tel Aviv, beginning a virtuous circle that attracts investment and entrepreneurs to the city and beyond.
The triggering of Article 50 has forced us to consider the foundations of this tech success, and look at where we will source international capital and talent in future.
We rely on European developers and data scientists to fill technical roles in startups and scaleups, with one in five London tech employees drawn from the EU.
US dollars still drive the capital requirements of our scaleups by participating in 60 per cent of UK funding rounds of £10m or more. Economic growth and innovation across Africa and Asia is accelerating. London is emerging a world-class cluster standing on the shoulders of giants.
The prospect of Brexit is now causing us to examine many of these relationships for the first time. Our thriving tech entrepreneurs cannot risk becoming “citizens of nowhere” and losing access to US investment, European talent, or growth prospects in emerging markets.
Rather than await the outcome, the tech community has taken it upon ourselves to shine a spotlight on these international bridges and partnerships. Our entrepreneurs are doing what they do best and taking responsibility for their own fate.
The Brexit referendum is linked to immigration, and this is where London tech is starting to feel the pain. Research done by Tech London Advocates has shown that 55 per cent of London’s tech professionals believe that Brexit’s impact on talent is the greatest threat to our sector.
We have built world-class fintech and artificial intelligence startups here by attracting the best and brightest from across the continent and around the world, and this talent pipeline is now under threat. Our success and competitive advantage depends on our people, with their ideas, skills, and creativity.
The uncertainty caused by the referendum has also led to concerns from US investors, who make up a significant portion of UK tech funding, particular at later-stage.
This has not caused a noticeable effect as private markets currently offer plenty of capital, but we cannot rely on this cyclical factor for continued good fortune. We need to provide peace of mind and a clear roadmap for our continued tech success.
Many advocates respect the referendum decision and the desire to reduce immigration nationally, but we must also respect London’s decision and the needs of our startups and scaleups to fill highly skilled roles, often at short notice.
Whether it is through specific visas for sectors or geography, or simply removing red tape by allowing third parties such as VC firms and accelerators to sponsor visas, we need immigration reform that brings in more talent, rather than less.
The money will follow the people, and our relationships with investors, from China and Japan to California, are strong enough to shake off existing uncertainty, but only if we can demonstrate that we can access the talent and innovation needed to continue the sector’s growth.
The UK economy is too reliant on tech for the government to ignore our concerns, and the Prime Minister’s recent announcement indicates that politicians are starting to listen. Our city owes too much to European Londoners to abandon them, and too much to our thriving tech sector to take them away.
We need to consider our sector’s needs and build our Brexit strategy around this, rather than watching and hoping for the best from the sidelines.
We are putting these issues to the Global Tech Advocates community later today at the Tech World Tour at Here East. Domestic and international entrepreneurs will discuss movement of capital and talent, laying out the opportunity for the UK’s fastest growing sector to continue to deliver on the global stage.
Our community is putting forth proactive recommendations that move beyond intra-party squabbling and prioritise the jobs and innovation that Britain needs, if we are to ensure our global position as an emerging tech leader.